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that 1988 was the final year Golden Rule Furniture was in
existence.
Petitioner claimed the following expenses and deductions for
Golden Rule Furniture on the Schedule C attached to petitioners'
1988 Federal joint tax return: $35,240 for cost of goods sold;
$5,493 for car and truck (auto expenses); $1,795 for
utilities/telephone expenses; $710 for meals/entertainment
expenses; $6,846 for freight expenses; and $1,979 for
commissions.
Of the amounts claimed, respondent allowed $8,408 for cost
of goods sold and $4,891 for auto expenses. Respondent
disallowed the remaining deductions due to lack of verification.
Petitioners have the burden to prove that respondent's
determinations are incorrect. Rule 142(a); Welch v. Helvering,
290 U.S. 111 (1933). Deductions are a matter of legislative
grace. A taxpayer seeking a deduction must be able to show that
the taxpayer comes within the express provisions of the statute.
New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Respondent disallowed $26,832 of the amount claimed for cost
of goods sold. At trial, petitioners failed to introduce any
evidence that they are entitled to a larger deduction than the
amount allowed by respondent. Indeed, petitioner admitted that
"I don't have any evidence." Consequently, petitioners have not
met their burden of proof. We sustain respondent on this issue.
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